fNFT use cases
xPICA fNFTs, through their composability, allow the underlying assets to remain locked, but allow the representative token to continue to be used. As such, xPICA token holders are actively able to earn yield and use their fNFT for other means, such as governance, while ultimately being able to burn their fNFT at the end of the locked period and return rewards.
xPICA fNFTs can also be used as collateral for lending and leveraged trading, and to be traded on secondary marketplaces. This unlocks a new avenue of profit-making for xPICA holders and dramatically increases the utility of the fNFTs.
Bonding and distribution of fNFTs as ecosystem rewards
xPICA fNFTs allows users to be rewarded without the creation of high inflationary pressures on native tokens. For example, farming incentives can be distributed as fNFTs to reward Pablo users, without the need to mint and endless give out Pablo tokens, diluting their price and value.
We will further implement that locked PICA is not sitting idle in the treasury and is used for collator staking. The value generated through this will therefore flow back as yield to xPICA fNFT holders through the existing model. The xPICA, therefore, becomes not only the yield-bearing boosted version of PICA but also becomes the equivalent of a liquid staking derivative too once our collator staking feature is implemented. Through various streams of revenue and governance value drivers, xPICA will allow us to distribute rewards from income rather than inflation.
Governance through fNFTs
Once governance on Picasso is live, xPICA holders will be able vote on governance decisions. Ultimately, this means users will be able to incentivize and direct liquidity across different protocols on the Picasso ecosystem.
In the future, Picasso liquidity gauges will be established that direct liquidity incentives from the Picasso treasury. This will establish where liquidity is allocated, and establish additional governance utility for the xPICA fNFTs. New protocols being established on Picasso, for example, will be incentivized to bribe xPICA holders in order to direct liquidity to bootstrap their protocol.
Overview of xPICA for a user
- Users will lock PICA for varying lengths of time to receive xPICA, with longer locks receiving proportionally more rewards.
- Users holding xPICA will earn yield in the form of PICA, incubated tokens, and from various other streams such as collator staking, protocol revenue, and treasury revenue.
- Users will be able to claim token rewards as they are vested, being able to compound these back onto their original fNFT by relocking.
- Once the time-lock has finished, users will simply redeem their initial PICA or choose to renew their lock.
- Minting the xPICA position as an fNFT opens up significant opportunities for further utility of financial NFTs whilst ensuring the underlying tokens are locked, namely through collateralization and secondary market trading.
- Holding the xPICA fNFTs will initially entitle users to rewards, but most importantly will play a key role in the management and direction of treasury assets.